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TORONTO — Canadian health officials are drafting a proposal to prevent Internet pharmacies from selling mail-order prescription drugs to U.S. consumers, a spokesman said Wednesday, a move that would essentially kill a $700 million industry that has become increasingly popular with underinsured patients in search of cheaper medicine.

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The issue has become politically touchy for President Bush, whose administration has argued that reimporting U.S.-made drugs from Canada would put consumers at risk because U.S. regulators could not guarantee their safety. The pharmaceutical industry, which donated heavily to Bush’s re-election campaign, vehemently opposes reimporting drugs, a practice that undercuts their U.S. sales.

Representatives of both the U.S. and Canadian governments say Bush discussed the issue with Prime Minister Paul Martin when he visited last fall. That has sparked accusations that Bush pressured Martin to change Canadian policy — an accusation the White House denies.

Canadian prices rising
As part of its socialized medical system, the Canadian government sets drug prices that are substantially lower than those charged in the United States. But the savings from Canadian drugs purchased over the Internet are eroding. For example, savings on 100 pills of 20 milligrams of Lipitor, fell to 31 percent at the end of last year from 44 percent in the first quarter of 2003. The average Canadian price rose 26 percent to $201.01, while the American price was essentially flat at $290.34.

Under current practice, a prescription from a U.S. doctor is faxed to a Canadian doctor, who reviews the document along with the patient’s health history. The Canadian doctor will then sign and fax the prescription to a so-called Internet pharmacy, which ships the drug to the patient.

Canadian officials say such sales endanger the Canadian drug supply, though they admit no shortages currently exist. The government also maintains it is unethical for doctors to sign prescriptions without examining patients; Canadian doctors reject about 5 percent of the cross-border prescriptions, according to David MacKay, executive director of the Canadian International Pharmacy Association, an Internet pharmacy group.

New restrictions proposedThe three-pronged measure being considered by Canadian Health Minister Ujjal Dosanjh would prevent Canadian doctors from co-signing prescriptions for U.S. patients without examining them in person, spokesman Ken Polk said by telephone from India.

It also would prohibit prescriptions for foreigners who are not present in Canada and create a list banning certain drugs that are widely used by Canadians from being exported, Polk told The Associated Press.

Existing Canadian law says Canadian doctors must “attend upon” a patient when co-signing a prescription. “We may need to make that language more explicit,” Polk said.

A proposal was expected to be presented to Martin’s cabinet by the end of the month, Polk said, although Asian tsunami aid efforts were diverting government resources and it was not clear how much time would be required for approval.

“He’s made it pretty clear that he wants that unethical practice to stop,” Polk said of Dosanjh’s efforts.

New legislation, but not changes to existing regulations, would require support from opposition parties as well as Martin’s minority government to pass. It was not clear if a ban on co-signing prescriptions could be accomplished by just changing regulations.

Despite the Bush administration’s support for a ban, importing cheaper drugs from Canada is popular with U.S. lawmakers of both parties and has considerable support in Congress. The House already has passed a bill allowing reimportation once, and lawmakers in both parties say it would pass the Senate if Republican leaders would allow it to come up for vote there.

If legislation allowing reimportation were approved by Congress, Bush could face a difficult decision over to whether to sign the bill.

$1.4 billion in illegal drug shipments
While reimporting drugs is technically illegal, those laws are not enforced. Ten million illegal shipments of prescription drugs worth $1.4 billion entered the United States in 2003, about half of them from Canada. About 1.5 to 2 million prescriptions are filled in Canada each year using this method.

The issue is particularly sensitive for lawmakers representing northern U.S. states, where consumers sometimes travel to Canada to purchase cheaper drugs. Republican Gov. Tim Pawlenty of Minnesota has set up a Web site to help Minnesotans buy cheaper drugs from Canadian pharmacies, similar to I-SaveRx.com, a site helping people do the same in four other states.

Louise Crandall, spokeswoman for the Canadian Pharmacists Association, said the cross-border trade is responsible for rising drug costs in Canada, that it was unethical for doctors to co-sign prescriptions without examining patients and that the estimated 42 million Americans who are un- or underinsured would drain Canada’s drug supply.

MacKay, whose association’s 35 pharmacies mostly in western Canada control up to 85 percent of the cross border business, said the solution to fears that the United States will drain Canada’s drug supply is to ban wholesale purchases.

“The fear ... is bulk distribution, the Cost-Cos the Wal-Marts and the Safeways dumping huge quantities into the U.S. That would jeopardize the Canadian drug supply, but that’s not what we do,” MacKay said.